Zahn v. International Paper Co.

53 F.R.D. 430, 15 Fed. R. Serv. 2d 632, 3 ERC (BNA) 1191, 1971 U.S. Dist. LEXIS 11443
CourtDistrict Court, D. Vermont
DecidedSeptember 30, 1971
DocketCiv. A. No. 6192
StatusPublished
Cited by22 cases

This text of 53 F.R.D. 430 (Zahn v. International Paper Co.) is published on Counsel Stack Legal Research, covering District Court, D. Vermont primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zahn v. International Paper Co., 53 F.R.D. 430, 15 Fed. R. Serv. 2d 632, 3 ERC (BNA) 1191, 1971 U.S. Dist. LEXIS 11443 (D. Vt. 1971).

Opinion

OPINION AND ORDER

LEDDY, Chief Judge.

This is a diversity action in which the plaintiffs seek compensatory and punitive damages for impairment of their property rights as a result of the defendant’s alleged pollution of Lake Champlain. The named plaintiffs, allegedly owners of lakefront property in Orwell, Vermont, seek to maintain this suit as a class action under Rule 23(b) (3) of the Federal Rules of Civil Procedure. Plaintiffs allege that all lakefront landowners and lessees in the towns of Orwell, Shoreham, and Bridport, Vermont, numbering more than two hundred, are properly members of the class they seek to represent.

We must initially determine whether there is jurisdiction over all the members of the proposed class. The defendants contend that some members of the class are residents of New York and that the court does not have jurisdiction over these persons. This position is clearly untenable. One of the factors relied on by the Supreme Court in reaching its conclusion in Snyder v. [431]*431Harris, 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969) was that:

Under current doctrine, if one member of a class is of diverse citizenship from the class’ opponent, and no non-diverse members are named parties, the suit may be brought in federal court even though all other members of the class are citizens of the same State as the defendant and have nothing to fear from trying the lawsuit in the courts of their own State. See Supreme Tribe of Ben-Hur v. Cauble, 255 U.S. 356 [41 S.Ct. 338, 65 L.Ed. 673] (1921).

394 U.S. at 340, 89 S.Ct. at 1059.

The defendant’s contention that many members of the proposed class fail to meet the $10,000 jurisdictional amount is crucial, however. The sums in good faith claimed by the plaintiffs control the determination of jurisdictional amount unless “from the face of the pleadings, it is apparent, to a legal certainty, that the plaintiff [s] cannot recover the amount claimed * * St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288-289, 58 S.Ct. 586, 590, 82 L.Ed. 845 (1938). Applying this standard, we think that the named plaintiffs meet the jurisdictional amount. However, the named plaintiffs have made no allegations as to the damage sustained by each member of the proposed class. Indeed, it is unlikely that the property of every lakefront landowner in the towns of Orwell, Shore-ham, and Bridport is valued at $10,-000, and, to a legal certainty, it is not credible that every such owner has suffered pollution damage in excess of $10,000.

This action would have been considered a “spurious” class action under Rule 23 before its amendment in 1966, because the claims of the class members are separate and distinct. See, e. g., Snyder v. Harris, supra, 394 U.S. at 335-336, 89 S.Ct. 1053. Thus the question is whether federal courts have jurisdiction over all members of an allegedly otherwise proper class, in a class suit in which the claims of the class members are separate and distinct, if some members of the class individually meet the jurisdictional requirement as to the amount in controversy and others, who are not named representatives, do not.

In Snyder v. Harris, supra, the Supreme Court held that aggregation of damages to satisfy the jurisdictional amount is not permissible in “spurious” class actions. This doctrine, the Court held, is based upon its prior interpretation of the statutory phrase “matter in controversy” in 28 U.S.C. § 1332(a) and its predecessors, rather than on Rule 23 or any other rule of procedure. The Court looked for interpretation of this phrase to Troy Bank v. Whitehead & Co., 222 U.S. 39, 40, 32 S.Ct. 9, 56 L.Ed. 81 (1911), Pinel v. Pinel, 240 U.S. 594, 36 S.Ct. 416, 60 L.Ed. 817 (1916), and Clark v. Paul Gray, Inc., 306 U.S. 583, 59 S.Ct. 744, 83 L.Ed. 1001 (1939). All three of these cases state that each plaintiff must meet the jurisdictional amount. Both Troy Bank and Pinel were joinder cases, but Snyder stated that Clark applied this joinder doctrine to class actions (although we confess that we can find nothing in the official report of Clark clearly indicating that it was, in fact, a class action). Professor Wright notes that the “dissenters in Snyder thought that the rule there announced would apply ‘in all cases where one or more of the co-plaintiffs has a claim of less than the jurisdictional amount * * ” Nevertheless, he claims that Snyder does not definitely decide the issue because “the majority did not speak to the point * * C. Wright, Handbook of the Law of Federal Courts § 72, at 316 n. 86 (2d ed. 1970), quoting 394 U.S. at 343, 89 S.Ct. 1053. On this we disagree, for we find the majority’s language clear and unambiguous. We therefore think that Snyder precludes our obtaining jurisdiction over those members of the proposed [432]*432class who do not meet the $10,000 jurisdictional requirement.

To be sure, the basis of Snyder is a reaffirmation of quite well settled law as applied to the amended Rule 23, whereas it has never been settled by a square holding that every unnamed class member in a spurious class suit must individually satisfy the jurisdictional monetary limitation. Neither Snyder nor Clark involved named plaintiffs all of whom met the jurisdictional amount. Before the amendment of Rule 23 in 1966 the majority of the case law held that only named plaintiffs (i. e., the original parties and those who intervened under prior Rule 24) were bound by the result of a spurious class action. See C. Wright, supra, § 72 at 310. As amended, Rule 23 provides that all members of a class who do not request exclusion are bound by the resulting judgment. Thus only after the 1966 amendment did the issue of whether an unnamed plaintiff was required independently to meet the jurisdictional amount become significant. The aggregation issue resolved in Snyder, however, was always important as it related to the jurisdictional requirements for named as well as unnamed plaintiffs. Nevertheless, despite this possible distinction, we feel bound by the clear language of the Supreme Court; accordingly we hold that each class member in a spurious class action must independently satisfy the requirement as to jurisdictional amount. Nor do we find room in the Court’s language for the admittedly attractive distinction proposed by one commentator in discussing the jurisdictional requirements for intervention under the prior Rule 24: “Should a large number of claimants meet the jurisdictional requirements, a few claimants who do not meet them could be deemed within the ancillary jurisdiction of the court.” G. Fraser, Ancillary Jurisdiction and the Joinder of Claims in the Federal Courts, 33 F.R.D. 27, 45 (1963) (footnote omitted).

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Bluebook (online)
53 F.R.D. 430, 15 Fed. R. Serv. 2d 632, 3 ERC (BNA) 1191, 1971 U.S. Dist. LEXIS 11443, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zahn-v-international-paper-co-vtd-1971.